This article includes perspectives from IQI real estate negotiators; Vincy Lim from Tawau and David Leong from Kota Kinabalu, providing valuable insights into the primary property interests of investors in Sabah.
If a country were to have a favourite child, Sabah would be Malaysia’s golden child.
Located on the island of Borneo in Malaysia, the state is known for its natural beauty, rich culture, and economic potential.
In recent years, the property market in Sabah has witnessed dynamic growth, particularly in key cities and hotspots like Kota Kinabalu and Tawau.
Not to mention, there’s an influx of international investors, particularly from China, who are purchasing land to develop hotels and resorts.
Hence every year, the Malaysia government would allocate over millions of ringgits to develop Sabah and Sarawak economic infrastructure projects.
And this tradition continues with 2025 Budget Malaysia tabling revealing RM6.7 billion to be allocated under Sabah, focusing on essential infrastructure such as roads, electricity, and clean water.
So besides being a top tourist destination, what else does Sabah have to offer?
Above all, what gives buyers, investors, and tourists the confidence to choose this state?
Table of contents
Sabah Property Insight
Different Types of Housing in Sabah
According to Vincy Lim, Tawau serves as one of the regions in Sabah where affordable housing schemes are a major focus.
The Rumah Mesra Rakyat and PR1MA programs have become popular among middle-to-low-income families due to their affordability.
These schemes typically offer homes priced below RM 250,000, with prices depending on income levels, family size, and location.
However, for those looking for larger landed properties, the prices are much higher.
If you opt for private sectors, the price for landed terraces typically starts at RM 800,000 and above. While Semi-detached homes range between RM 1.3 million to RM 1.4 million.
| Types of Housing in Tawau | Prices |
| Affordable Housing Schemes (Rumah Mesra Rakyat, PR1MA and more) | Starting from RM 250, 000 *Depending on income levels |
| Private Sectors – Landed Terrace | RM 800, 000 >> |
| Private Sectors – Semi Detached | RM 1.3 million – RM 1.4 million |
As for Kota Kinabalu, David Leong mentioned that the capital city of Sabah, is a bustling urban center with a diverse range of properties, from luxurious condominiums to landed homes and commercial real estate.
And unlike Tawau, Kota Kinabalu (KK) has a larger urban population and a greater demand for both landed properties and high-rise condominiums.
Landed homes in KK can be quite expensive, with prices reaching up to RM 1.5 million for larger properties in desirable areas.
On the other hand, condominiums in the city typically range from RM 1.2 million to RM 1.5 million for units between 1,200 and 1,500 sq ft.
| Types of Housing in Kota Kinabalu | Prices |
| Affordable Housing Schemes (Rumah Mesra Rakyat, PR1MA and more) | Starting from RM 250, 000 *Depending on income levels |
| Private Sectors – Landed Terrace | RM 1.5 million |
| Private Sectors – Semi Detached | RM 1.2 million – RM 1.5 million |
These condominiums are particularly popular for Airbnb rentals, as KK’s tourism sector continues to grow.”
David Leong
First Time Homebuyers Incentive
During the 2025 Budget tabling, the government also highlighted their strong commitment of RM5.93 billion for housing initiatives, suggesting a major investment in making homes more accessible for all Malaysians.
This includes first-time home buyers who can get up to RM7,000 tax break when buying residential properties that cost up to RM500,000.
Families are the primary applicants for affordable housing schemes, which offer a great opportunity for residents to own homes at subsidized prices.”
Vincy Lim
Investment Potential in Sabah
As for investment opportunities, Samporna is the best spot to invest in Sabah.
The town is famous for its proximity to Sipadan, a world-renowned diving destination.
In Semporna, rental prices for properties in prime tourist locations can range from RM 5,000 to RM 10,000 per month, reflecting the high demand due to the area’s popularity among tourists.
For this, investors often start Airbnb businesses to attract tourists who prefer the flexibility of renting a property instead of staying in costly hotels.
Furthermore, the expansion of Tawau Airport is expected to further stimulate tourism and property development in Semporna, making it an even more attractive location for real estate investors.
The investment market in Semporna is geared towards the tourism industry, with many new hotels being built.”
Vincy Lim
Over the past few years, there has been an influx of both local and international investors, particularly from China, who are purchasing land to develop hotels and resorts.
As of September 2024, Sabah’s Chief Minister, Datuk Seri Hajiji Noor revealed that the state’s economic ties with China were driven by strong trade, investment, and collaborative projects across sectors.
This includes hospitality like hotels and beach homes to turn into villas.
Additionally, Watervillas and properties on the nearby islands are also increasingly sought after by high-end investors.
Sabah as Tourism Destination
The Beauty of its Nature
The pristine beaches, lush rainforests, and lively culture make it a favourite spot for those who love nature, crave adventure, or appreciate cultural experiences.
The expansion of the tourism industry in Sabah has led to a significant increase in demand for commercial properties, especially those located close to major tourist attractions.
Vincy recommends Kundasang as the prime location for relocation or investment in Sabah, particularly for those interested in mountain areas.
Situated in the highlands of the Ranau, Kundasang boasts a tranquil and cool climate, making it an ideal retreat from the tropical heat.
The town provides stunning views of Mount Kinabalu, the tallest mountain in Southeast Asia, and it’s refreshing mountainous climate offers a welcome escape from the heat and humidity.”
Vincy Lim
Local Festivals
Its local culture also plays a role in shaping the real estate market.
One of the key cultural events is the Harvest Festival (also known as the Kaamatan Festival), which mainly targets local visitors.
Traditional events, such as the Rekata Lebah, are also part of the region’s rich cultural heritage.
These major tourism contributors directly contribute to Sabah’s economy through visitor spending on accommodation, food, transportation, shopping, and activities.
As it also helps the industry create employment opportunities in various sectors, including hospitality, transportation, retail, and entertainment.
These festivals not only attract tourists but also promote cultural exchange and foster a sense of community.”
David Leong
Second-Home Purchases
As mentioned earlier, Sabah is a popular destination for both local and international property investors.
Though KK is a well-known area in Sabah, the lively city can be challenging for those looking to connect with nature.
Instead, many nature lovers and investors from Sarawak, Brunei, Taiwan, Korea, and China are keen on purchasing second homes in beautiful locations such as Manukan and Sapi islands, as well as the cooler highlands of Kundasang and Danum Valley.
Sabah’s Economic Development
Pan-Borneo Highway
The Pan-Borneo Highway, which gained the likes and support of both locals and tourists, has now entered its 1B Phase, according to reports. This will make access to the city from Brunei easier and potentially drive further economic growth.
The highway stretches around 2,000 kilometers, linking the Malaysian states of Sabah and Sarawak, as well as Brunei.
The highway has facilitated cross-border engagements, improving transport, trade, and tourism in the area. It enables Bruneian investors to explore opportunities in Sabah’s property market and vice versa.
Conclusion
To wrap it up, Sabah’s real estate market offers a range of opportunities for both local and international investors.
With its affordable housing schemes and tourism attraction, the region provides great potential for those looking to enter the property market at an affordable price point.
And with its developing and diverse property landscape, the opportunities in high-end condominiums, landed homes, and commercial real estate also arises.
As more buyers capitalise on these offerings, the demand for residential properties in Sabah is likely to rise in the coming years.
This positions Sabah as a vibrant and promising destination for property investors.
Based in Tawau, Vincy Lim has years of experience in real estate and has recently been recognised as IQI Top Subsales Performers for the Tawau area. For more information, follow Vincy’s Property Facebook page.
Based in Kota Kinabalu, David Leong boasts years of expertise in the real estate field, consistently earning awards and accolades from IQI each year. Stay up to date with David by following his Property Facebook Page.
You’ve discovered the key factors that position Sabah as a prime property investment opportunity! With its affordable housing schemes and tourism attraction, the region provides great potential for those looking to enter the property market at an affordable price point. If you’re interested, drop us a message and we’ll connect you with our experts!
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